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This is really an argument against socialism as the communists tried to implement it. Where the state nationalizes every industry and all workers become employe

This is really an argument against socialism as the communists tried to implement it. Where the state nationalizes every industry and all workers become employed by the state which plans everything centrally. Most socialists have moved beyond that model and would instead prefer to see a system of enterprise that uses co-op's instead of privately or publicly owned business. Some industries would probably be nationalized or socialized, but not much more than already is in the best parts of Europe. The main idea is to make the enterprises benefit those who do the actual work and also make them accountable to those people and their communities. The main problem with capitalism is that someone other than the people doing the work get to decide how the work is done and how to spend the surplus of value that work generates. If the workers decided these things they would never vote to outsource their own jobs and would rarely choose to pollute their own communities. They wouldn't vote to reward a tiny minority with a fortune while they pay themselves poverty wages.

dantheman 13y ago
Jobs would still move, it's just that an industry in another country owned by someone else would eventually take the business. That is unless the local industry was somehow able to ban foreign competition. The beauty of capitalism is that it roots out inefficiency. If you take a look at history, state controlled enterprises are the most polluting.
- briandear 13y ago
  Exactly. Spend some time in the foreign Soviet Bloc and this is crystal clear.
- ljf 13y ago
  You don't have to ban foreign competition, it just has to be an informed choice. Why is company x cheaper, what can we do to emulate them (do we want to?). Although we might have higher costs buying locally what other benefits do we have?
  - gnarbarian 13y ago
    you as a consumer are free to make this decision yourself. This is why "Alaska Grown" farmers are still popular and competitive up here.
- breakyerself 13y ago
  If all things are equal and the advantage of the foreign competitor is based entirely on cheaper labor and efficient production then fine. Let the market sort it out. There should however be protections against the outsourcing of pollution. You shouldn't be able to undercut local products by dumping your waste stream in a river. Which is often the case. There should also be some basic standards for the foreign workers who produced imported goods.
gnarbarian 13y ago
One problem with this is people as a group tend to be stupid. What stops the workforce from voting to reduce their work hours to 30 hours per week? Take the Automotive unions as an example. Their demands contributed in many ways to the US auto companies nearly going bankrupt and requiring state bailouts. Moving manufacturing to cheaper places can have a bad local effect in pockets that depend on it, but there is a net gain for us as consumers in an economy to be able to acquire things cheaply. So our auto manufacturers complained they can't compete against the Japanese imports, we cranked up a bunch of tariffs to artificially increase the cost of foreign produced goods. For consumers that is a net loss as it drives up our prices. Now, foreign companies produce many of their cars in the united states with union free labor and american companies have started producing cars in mexico so they can pay the pensions for all the retired union employees. This is a simplification but that's how I understand it. I'm not arguing that unions are bad. only that they can be very bad. There are benefits when there is an /abusive/ monopoly supplying jobs. (think foxconn), but unions can be just as abusive as employers and literally kill their own employers in the process. The free market is the best solution to the problem which enables a company to hire non-union employees when the union's demands become too great. My philosophy is that if you can't compete on price you need to compete on quality and offer a superior product. (This is why people still buy German produced cars in other countries regardless of the increased cost in manufacturing). For clarification sake I'm saying that the mass of people at the bottom of an organization can have demands that conflict with the survival of the business. It's good that there are smart people who fought their way up the bureaucracy through a meritocracy. They generally won't make a decision that will obviously drive a company straight into the dirt while this is distinct risk in unions with entitlement issues.
- guelo 13y ago
  It's funny you mention Germany there at the end since it undermines your whole argument. German auto workers are all unionized and they earn double what American auto workers do.
  - gnarbarian 13y ago
    It doesn't undermine my argument. I said they compete on quality. Unions can be just as tyrannical as a monopoly. If German companies didn't produce better cars than cheaper countries there would be no reason to buy them and very few people would. Added to my above comment: "For clarification sake I'm saying that the mass of people at the bottom of an organization can have demands that conflict with the survival of the business. It's good that there are smart people who fought their way up the bureaucracy through a meritocracy. They generally won't make a decision that will obviously drive a company straight into the dirt while this is distinct risk in unions with entitlement issues."
jl6 13y ago
>someone other than the people doing the work get to decide how the work is done and how to spend the surplus of value that work generates. Who do you mean here? Foreman, manager, executive, owner... these are all real jobs that do real work.
- gnarbarian 13y ago
  he must mean people like this: “He eats lunch when he arrives at work at 2 p.m. Then, like clockwork, he goes to sleep with a cup of soda on the table and the straw in it,” said Marvin Robbins, a union vice president. http://nypost.com/2013/05/28/labor-big-a-real-heavy-sleeper/ http://nypost.com/2013/05/28/labor-big-a-real-heavy-sleeper/
- tehwalrus 13y ago
  Out of interest, what do you think an 'owner' does in an enterprise with an executive branch, apart from supplying passive capital at the start?
  - philwelch 13y ago
    Hires and fires the executives. Doing that wrong is catastrophic.
  - jl6 13y ago
    Owners ensure the efficient allocation of capital. Their job is to pull investment from unprofitable activities and move it to profitable ones. They may only make one or two decisions a year, but those are weighty decisions with large consequences. With good decisions may come large profits with what looks to an outsider to be little effort, but they may also lose it all with just one mistake... appointing the wrong CEO, or failing to liquidate the company when it ceases to be profitable... Now there may certainly be issues with corporate governance and conflict with non-financial goals like environmental sustainability, but that's a wholly different complaint to the suggestion that there is a non-working class at the helm.
    - tehwalrus 13y ago
adventured 13y ago
Under Capitalism, if a worker disagrees with how their boss allocates their time and labor, the worker is free to start a new business just as the founder once had to. The worker is also free to seek superior employment, if they feel their worth is not being fully appreciated / utilized (and so on and so forth). Workers aren't appreciated at Business X? Start Business Z that treats its employees better. There are countless examples of this in practice over the last 150 years. Unions are also properly legal under Capitalism. That is, the free assembly of labor. If employees don't like how they are being treated, they can collectively negotiate to try to acquire more leverage. That completely removes your complaint about allocation of labor and accountability. Also, your entire premise rests on the notion that people are owed a particular job - just try telling nature it owes you shelter and three meals a day. The reality is, the capital to fund that job comes from someone that had to first create it. The West is losing this century because it has become lazy and hyper-entitled.
- samman 13y ago
  "The reality is, the capital to fund that job comes from someone that had to first create it." ...Starting from first principles (i.e. 'try telling nature'), how exactly is capital 'created'?
  - enoch_r 13y ago
    Capital is stuff people want. It's a warehouse full of couches, or a truck full of iPads. Or, on a desert island, a pile of hand-carved tools. We can trade this "stuff people want" for "stuff we want." Over time, we've developed abstractions called "dollar bills" that represent stuff people want. This allows me to have a more general form of capital--instead of having to exchange my "stuff people want" for what I want, I simply exchange it for money, and then trade that for what I want. This makes trade much easier--I don't have to find someone who wants 1,000 iPads in exchange for a piece of industrial equipment. But I repeat--this is just an abstraction. To create $1 or $1,000 or $1,000,000 of capital, resources must first be used to produce things that people want. Now, in our modern society, there are all sorts of ways to get ahold of these abstractions. Some people work for them. Some people are given them by family members. Some people make bets--at casinos, at horse races, or on the stock market--and win. So it is certainly possible to point at a given possessor of capital and say--"look! he has capital, but has not produced things that people want!" But that's the nature of people who own capital, not of capital itself.
bcoates 13y ago
> If the workers decided these things they would never vote to outsource their own jobs This implies they would be making the wrong decisions then, no? There needs to be some mechanism to decide who does what, or otherwise some goods and services will be produced in proportions well exceeding any possible demand. > The main idea is to make the enterprises benefit those who do the actual work and also make them accountable to those people and their communities. Once you start introducing multiple contradictory goals like this, you're back to the same problem that centrally planned capitalism and communism have: resolving these conflicts is an extremely difficult problem in an informational/computational sense. The local blacksmiths are of the opinion that only locally hand-wrought nails make the finest boots. The local bootmakers are of the opinion that the nails they can get for $1000/ton from China will suffice. The bootmakers are convinced that they are being idled by the limited supply of local nails, and that the blacksmiths are able to demand an unreasonable share of the value created from the boots because they have made their contribution to the boot scarce. Do you sacrifice the supply of boots or outsource the work of the blacksmiths?
- bjourne 13y ago
  The idea is to retain the good qualities of capitalism which is self-optimization and market-based decision making. The bootmaker and the nailmakers would be autonomous agents making decisions in their best interests. The bootmakers can buy nails from whoever they want, but if the market then rejects their boots because of shoddy nails, they will have to adapt. Also worth pointing out that in a specialized economy, most companies cooperate instead of competing with each other. The bootmakers likely need nails specifically designed for their boots so buying generic ones from China isn't an option. Instead they need to source a local supplier and tell them how the nails for their boots models need to be made. They enter a symbiotic relationship in which both benefit. Liberals like to see capitalism as a marathon where the runners compete with each other and the best ones win. But the system works more like the cells in a human body. Companies need to specialize and work together to be successful.
  - gnarbarian 13y ago
    "Liberals like to see capitalism as a marathon where the runners compete with each other and the best ones win. But the system works more like the cells in a human body. Companies need to specialize and work together to be successful." Be careful of painting with too broad a brush. Different industries operate in vastly different ways to very different outcomes in the long term. Compare http://en.wikipedia.org/wiki/Natural_monopoly http://en.wikipedia.org/wiki/Natural_monopoly to http://en.wikipedia.org/wiki/Perfect_competition http://en.wikipedia.org/wiki/Perfect_competition
gnarbarian 13y ago
I think that some industries/services would fare much better as co-ops. And you're free to start one and do it that way. I prefer credit-unions to banks. I would love to see more co-op style ISPs. Complaining that your co-op can't compete with the more private entity and thus must be propped up or the competitor handicapped is very bad though and has a negative results for consumers at large. When they can compete with privately held monopolies supplying the same service it's a win-win situation for us. Forcing places to be co-ops is not a good idea though and equates to a different kind of tyranny. Large Companies, Governments, and even Democratic majorities (think racism) can all be tyrannical and there is no silver bullet to eliminating it. You could say I'm libertarian leaning, but I also acknowledge the reality of large organizations which can be nearly as oppressive as the state and harbor similar levels of inefficiency.
bojan 13y ago
If the workers decided these things they would never vote to outsource their own jobs and would rarely choose to pollute their own communities. In Communist Yugoslavia we had something like that. There were companies that were managed by their employees, each having one vote. A proposal that would obtain a majority of votes would get to be implemented. But it turned out that people would rather vote to use surpluses to pay everyone bonuses than to invest back in production and modernization. Many companies got themselves outcompeted this way, especially compared to their Western counterparts. It is not a bad idea, but for that system to work you need workers that: 1) are educated in at least basics of economics and management, 2) are ready to take advice of someone with more expertise than them in these subjects, 3) are well off enough that they can sacrifice immediate additional income to enhance company's prospects for the future and 4) care enough.
- bjourne 13y ago
  That's not very different from having a company with an incompetent board of directors. In fact, it is exactly the same thing except in the Yugoslavia scenario every worker in the company would have a seat at the board. While it is true that some people could screw up their workplace for short term gains, is it more or less likely than an "investor" milking the company for profits and running the business to the ground?
  - gnarbarian 13y ago
    Who do you think is more likely to be incompetent, the board of directors of McDonald's or 10 employees chosen at random throughout the entire organization?
    - LekkoscPiwa 13y ago
      /sarcasm/ Come on! All people are equal! /sarcasm/
      - gnarbarian 13y ago
        I like you. You seem to get it. It's interesting how quickly people forget/ignore what life was like in Warsaw pact countries. Then when presented with one as an example they resort to "they practiced the wrong kind of Socialism" or "it failed because they did or didn't do X." When I ask my friends who lived there during that period they unanimously proclaim how much better life is now and how the standard of living has dramatically improved. Many more people can afford cars and there is incentive to work hard.
dnautics 13y ago
"Most socialists have moved beyond that model and would instead prefer to see a system of enterprise that uses co-op's instead of privately or publicly owned business. Some industries would probably be nationalized or socialized..." One of the earliest (and now largely forgotten) criticisms of Marx came from the American philosopher Benjamin Tucker, who facilely forsaw the rise of the communist implementations as an unavoidable consequence of Marxist socialism. So Tucker might argue that even a socialism as "modern socialists" would inevitably result in the same. Although this argument takes off further along that a partial state socialism, the crux of the idea of state expansionism and its effect on individual rights is salient: First, then, State Socialism, which may be described as the doctrine that all the affairs of men should be managed by the government, regardless of individual choice. Marx, its founder, concluded that the only way to abolish the class monopolies was to centralize and consolidate all industrial and commercial interests, all productive and distributive agencies, in one vast monopoly in the hands of the State. The government must become banker, manufacturer, farmer, carrier, and merchant, and in these capacities must suffer no competition. Land, tools, and all instruments of production must be wrested from individual hands, and made the property of the collectivity. To the individual can belong only the products to be consumed, not the means of producing them. A man may own his clothes and his food, but not the sewing-machine which makes his shirts or the spade which digs his potatoes. Product and capital are essentially different things; the former belongs to individuals, the latter to society. Society must seize the capital which belongs to it, by the ballot if it can, by revolution if it must. Once in possession of it, it must administer it on the majority principle, though its organ, the State, utilize it in production and distribution, fix all prices by the amount of labor involved, and employ the whole people in its workshops, farms, stores, etc. The nation must be transformed into a vast bureaucracy, and every individual into a State official. Everything must be done on the cost principle, the people having no motive to make a profit out of themselves. Individuals not being allowed to own capital, no one can employ another, or even himself. Every man will be a wage-receiver, and the State the only wage-payer. He who will not work for the State must starve, or, more likely, go to prison. All freedom of trade must disappear. Competition must be utterly wiped out. All industrial and commercial activity must be centered in one vast, enormous, all-inclusive monopoly. The remedy for monopolies is monopoly. Such is the economic programme of State Socialism as adopted from Karl Marx. He was writing this a full 20 years before the communist states came into existence.
gabemart 13y ago
What's to stop the type of co-op based company you describe becoming popular in the current market system?
- drjesusphd 13y ago
  Depends on the particular market and how bloated it's gotten. Note the recent surge in credit unions.
epsylon 13y ago
Coops, exactly. These days I'm reading the Mars Trilogy by Kim Stanley Robinson (WARNING: minor spoilers), and he mentions a lot the system of coops in the new Martian economy. One of the examples mentioned is a real-life one: the Mondragón Corporation, the world's largest coop with 80,000 employees and more than 14 billion euros in revenue. https://en.wikipedia.org/wiki/Mondrag%C3%B3n_Cooperative_Corporation https://en.wikipedia.org/wiki/Mondrag%C3%B3n_Cooperative_Cor... (For anyone interested in economics, politics, geology and many other topics, this Hugo-winning trilogy is a great read. https://en.wikipedia.org/wiki/Mars_trilogy https://en.wikipedia.org/wiki/Mars_trilogy)
paganel 13y ago
> If the workers decided these things they would never vote to outsource their own jobs That would benefit said workers themselves, but the cost (because there is a cost) will be shouldered by some other people living in the same country. In other words this is protectionism pure and simple, in the long run is detrimental for everyone involved.
vidarh 13y ago
It is an argument against a very specific form of socialism as implemented by marxist-leninists. Already by the end of the 1800's there was a wide schism between left communists/liberalist marxists, anarchist communists, Luxembourgist/Spartakists and a number of other anti-authoritarian communist ideologies on one hand, and Leninists on the other about the role of the state in the socialist transition phase, where the left communists and liberalist marxists have consistently been against the idea of a vanguard party (the leninist party model) and against the idea of a strong state. "Left communism" is generally defined by being "to the left of Leninism" (EDIT: And many left communists does not consider Leninism a socialist ideology at all), though it is worth pointing out that Leninism in itself is not necessarily authoritarian. The left communist criticism of Leninism initially focused on the (as it turned out) well founded risk that having a vanguard party following a nearly military discipline and that was not intended to include regular people in the party decision making provided a massive potential threat if it were to be abused (as it of course ended up being - it was the ultimate cultist echo-chamber combined with a fair number of power hungry people mixed in with the idealists). Most socialists have always been against this model, and most communists were arguably also against the leninist model until at least 1920 or so. After the April 1917 revolution, the Bolsheviks was a small-ish minority group even in Russia, next to the Mensheviks, Socialist-Revolutionaries, Left Socialist-Revolutionaries, most of whome were left communists, other forms of socialist revolutionaries, and some reformists. After the Bolshevik coup (the October Revolution - I don't like calling it a revolution, as it only had the support of a relatively small minority - it succeeded only because the Bolshevik support was largely concentrated in a few of the big cities, giving them the ability to cease control of the still weakened government apparatus), the Leninist model gained a lot of undeserved support, and cemented its position thanks to the combination of the perceived successes of the Bolsheviks (even some fairly right wing writers came back from the Soviet Union impressed with progress in things like electrification and got caught up in it), the civil war and the capitalist countries support for the Whites, which made it easy for the Bolsheviks to excuse pretty much anything they wanted to do by claiming they were fighting foreign funded anti-Russian/anti-Soviet counter-revolutionaries, and where the anti-Bolshevik fervour in the Western press made it impossible for socialists to trust them - even when they were right about the later excesses especially under Stalin. Left communism was still widespread enough by 1920, with left communist groups in several instances still participating in demonstrations and small scale attempted revolts and armed attacks, to make Lenin publish a pamphlet ridiculing it ("Left Communism: An Infantile Disorder"). A number of prominent left communists who had tried to remain with the Bolsheviks and try to influence the party, and many more outside it, eventually lost their lives over it as especially Stalin dialled up the terror to get full control and left communism was seen as a considerable threat. Also note that while Haldane later became skeptical about the Soviet Union, when he wrote this article, he was well on his way to becoming a Marxist-Leninist, arguably a Stalinist. As late as 1962 he reiterated his admiration for Stalin.... Anyway, though we agree that the Marxist-Leninist/Stalinist idea of socialism was fundamentally broken, what you describe is a specific type of socialism that is quite far from the mainstream today. Most socialists are social democrats. Within social democratic parties you do find some support for co-ops, but as limited tendencies (e.g. in the UK, the Co-operative Party is in permanent alliance of some sort with the Labour Party). Within most revolutionary socialist organisations finding support for the coop movement is relatively rare, as it is seen as too limited. You do find quite a lot (to the extent you can talk of "a lot" in organisations of this size...) of support for left communist ideologies like council communism and market communism though, which share characteristics similar to those you describe.
yaakov34 13y ago
You're describing syndicalism; it's not true that it was never implemented by the communists. The Soviet Union had a very serious go at it, allowing the artel as an economic unit (essentially a kind of co-op), and allowing people to freely sell products of their own labor. Within months, this led to a renewed stratification of society, the emergence of a nouveau rich class, and something approaching a return to capitalism (some people's labor is more profitable than others'). In the case of the Soviet Union, this led to a crackdown on the labor market. They also made attempts to organize along trade union lines instead - which reduces the stratification problem somewhat since a trade is not a single economic unit - but having the electricians and the mechanics within a factory report to different management was not practicable. The USSR came to its system of government-run conglomerates because it was the only way they found to combine socialism with getting at least something done; it was not their initial intention to have everything run by the government, if only because the didn't really want the management burden. In other cases, the evolution towards capitalism just ran its course. Israel stumbled into syndicalism by default - its labor unions and cooperatives predate the state. In virtually all cases, the cooperatives did not grant new members the same rights as the founding members. E.g. the bus cooperative - which started out as a free association of owner-drivers - now relies on hired labor for most of the actual driving, with wages the same as any other driving job in the capitalist free market. The final stop for this kind of developments is in the unionized ports, where they have full union members making tens of thousands of dollars a month for sinecure jobs, with a lot of the gruntwork being done by minimum-wage hired labor with no rights. It's nice to talk about how "the workers" will not vote for this or that, but when it comes to voting members - of anything - voting themselves more rights than the people asking to join, they have, they did, and they will vote for that.
- vidarh 13y ago
  It is worth noting that the USSR came into that system for many reasons, but not least because they tried something that Marx had explicitly warned against: Attempting revolution somewhere that was so poor that redistribution would make want for basic necessities universal. Marx pointed out already in The German Ideology (1845) that this would just cause a return to class struggle, as it creates an immense incentive for people to find ways to accumulate, no matter how much you try to crack down on it. This was one of many objections to the Bolshevik rush to try to develop socialism, but by the time of the Bolshevik power grab, Lenin had spent 25 years inventing excuses for how Russia could somehow avoid that trap, starting by his fantasy that the Bolshevik would somehow get the support of poor farmers (didn't happen)... Didn't save him from it.
pron 13y ago
> The main problem with capitalism is that someone other than the people doing the work get to decide how the work is done and how to spend the surplus of value that work generates. I think that the main problem with capitalism is that a free market system (assuming it works, though it doesn't in practice because competition doesn't quite behave according to the abstract models) strives to maximize economic output rather than welfare. Some capitalists care enough to hope that a system that maximizes product would also improve welfare, but that is not the goal; at best, it's a desirable side effect. That is why many critics of capitalism point out that under capitalism, people serve the "economy" rather than the other way around.

dantheman 13y ago

Jobs would still move, it's just that an industry in another country owned by someone else would eventually take the business. That is unless the local industry was somehow able to ban foreign competition. The beauty of capitalism is that it roots out inefficiency. If you take a look at history, state controlled enterprises are the most polluting.

briandear 13y ago
Exactly. Spend some time in the foreign Soviet Bloc and this is crystal clear.
ljf 13y ago
You don't have to ban foreign competition, it just has to be an informed choice. Why is company x cheaper, what can we do to emulate them (do we want to?). Although we might have higher costs buying locally what other benefits do we have?
- gnarbarian 13y ago
  you as a consumer are free to make this decision yourself. This is why "Alaska Grown" farmers are still popular and competitive up here.
breakyerself 13y ago
If all things are equal and the advantage of the foreign competitor is based entirely on cheaper labor and efficient production then fine. Let the market sort it out. There should however be protections against the outsourcing of pollution. You shouldn't be able to undercut local products by dumping your waste stream in a river. Which is often the case. There should also be some basic standards for the foreign workers who produced imported goods.

gnarbarian 13y ago

One problem with this is people as a group tend to be stupid. What stops the workforce from voting to reduce their work hours to 30 hours per week? Take the Automotive unions as an example. Their demands contributed in many ways to the US auto companies nearly going bankrupt and requiring state bailouts. Moving manufacturing to cheaper places can have a bad local effect in pockets that depend on it, but there is a net gain for us as consumers in an economy to be able to acquire things cheaply. So our auto manufacturers complained they can't compete against the Japanese imports, we cranked up a bunch of tariffs to artificially increase the cost of foreign produced goods. For consumers that is a net loss as it drives up our prices. Now, foreign companies produce many of their cars in the united states with union free labor and american companies have started producing cars in mexico so they can pay the pensions for all the retired union employees. This is a simplification but that's how I understand it. I'm not arguing that unions are bad. only that they can be very bad. There are benefits when there is an /abusive/ monopoly supplying jobs. (think foxconn), but unions can be just as abusive as employers and literally kill their own employers in the process. The free market is the best solution to the problem which enables a company to hire non-union employees when the union's demands become too great. My philosophy is that if you can't compete on price you need to compete on quality and offer a superior product. (This is why people still buy German produced cars in other countries regardless of the increased cost in manufacturing). For clarification sake I'm saying that the mass of people at the bottom of an organization can have demands that conflict with the survival of the business. It's good that there are smart people who fought their way up the bureaucracy through a meritocracy. They generally won't make a decision that will obviously drive a company straight into the dirt while this is distinct risk in unions with entitlement issues.

guelo 13y ago
It's funny you mention Germany there at the end since it undermines your whole argument. German auto workers are all unionized and they earn double what American auto workers do.
- gnarbarian 13y ago
  It doesn't undermine my argument. I said they compete on quality. Unions can be just as tyrannical as a monopoly. If German companies didn't produce better cars than cheaper countries there would be no reason to buy them and very few people would. Added to my above comment: "For clarification sake I'm saying that the mass of people at the bottom of an organization can have demands that conflict with the survival of the business. It's good that there are smart people who fought their way up the bureaucracy through a meritocracy. They generally won't make a decision that will obviously drive a company straight into the dirt while this is distinct risk in unions with entitlement issues."

jl6 13y ago

>someone other than the people doing the work get to decide how the work is done and how to spend the surplus of value that work generates. Who do you mean here? Foreman, manager, executive, owner... these are all real jobs that do real work.

gnarbarian 13y ago
he must mean people like this: “He eats lunch when he arrives at work at 2 p.m. Then, like clockwork, he goes to sleep with a cup of soda on the table and the straw in it,” said Marvin Robbins, a union vice president. http://nypost.com/2013/05/28/labor-big-a-real-heavy-sleeper/ http://nypost.com/2013/05/28/labor-big-a-real-heavy-sleeper/
tehwalrus 13y ago
Out of interest, what do you think an 'owner' does in an enterprise with an executive branch, apart from supplying passive capital at the start?
- philwelch 13y ago
  Hires and fires the executives. Doing that wrong is catastrophic.
- jl6 13y ago
  Owners ensure the efficient allocation of capital. Their job is to pull investment from unprofitable activities and move it to profitable ones. They may only make one or two decisions a year, but those are weighty decisions with large consequences. With good decisions may come large profits with what looks to an outsider to be little effort, but they may also lose it all with just one mistake... appointing the wrong CEO, or failing to liquidate the company when it ceases to be profitable... Now there may certainly be issues with corporate governance and conflict with non-financial goals like environmental sustainability, but that's a wholly different complaint to the suggestion that there is a non-working class at the helm.
  - tehwalrus 13y ago

adventured 13y ago

Under Capitalism, if a worker disagrees with how their boss allocates their time and labor, the worker is free to start a new business just as the founder once had to. The worker is also free to seek superior employment, if they feel their worth is not being fully appreciated / utilized (and so on and so forth). Workers aren't appreciated at Business X? Start Business Z that treats its employees better. There are countless examples of this in practice over the last 150 years. Unions are also properly legal under Capitalism. That is, the free assembly of labor. If employees don't like how they are being treated, they can collectively negotiate to try to acquire more leverage. That completely removes your complaint about allocation of labor and accountability. Also, your entire premise rests on the notion that people are owed a particular job - just try telling nature it owes you shelter and three meals a day. The reality is, the capital to fund that job comes from someone that had to first create it. The West is losing this century because it has become lazy and hyper-entitled.

samman 13y ago
"The reality is, the capital to fund that job comes from someone that had to first create it." ...Starting from first principles (i.e. 'try telling nature'), how exactly is capital 'created'?
- enoch_r 13y ago
  Capital is stuff people want. It's a warehouse full of couches, or a truck full of iPads. Or, on a desert island, a pile of hand-carved tools. We can trade this "stuff people want" for "stuff we want." Over time, we've developed abstractions called "dollar bills" that represent stuff people want. This allows me to have a more general form of capital--instead of having to exchange my "stuff people want" for what I want, I simply exchange it for money, and then trade that for what I want. This makes trade much easier--I don't have to find someone who wants 1,000 iPads in exchange for a piece of industrial equipment. But I repeat--this is just an abstraction. To create $1 or $1,000 or $1,000,000 of capital, resources must first be used to produce things that people want. Now, in our modern society, there are all sorts of ways to get ahold of these abstractions. Some people work for them. Some people are given them by family members. Some people make bets--at casinos, at horse races, or on the stock market--and win. So it is certainly possible to point at a given possessor of capital and say--"look! he has capital, but has not produced things that people want!" But that's the nature of people who own capital, not of capital itself.

bcoates 13y ago

> If the workers decided these things they would never vote to outsource their own jobs This implies they would be making the wrong decisions then, no? There needs to be some mechanism to decide who does what, or otherwise some goods and services will be produced in proportions well exceeding any possible demand. > The main idea is to make the enterprises benefit those who do the actual work and also make them accountable to those people and their communities. Once you start introducing multiple contradictory goals like this, you're back to the same problem that centrally planned capitalism and communism have: resolving these conflicts is an extremely difficult problem in an informational/computational sense. The local blacksmiths are of the opinion that only locally hand-wrought nails make the finest boots. The local bootmakers are of the opinion that the nails they can get for $1000/ton from China will suffice. The bootmakers are convinced that they are being idled by the limited supply of local nails, and that the blacksmiths are able to demand an unreasonable share of the value created from the boots because they have made their contribution to the boot scarce. Do you sacrifice the supply of boots or outsource the work of the blacksmiths?

bjourne 13y ago
The idea is to retain the good qualities of capitalism which is self-optimization and market-based decision making. The bootmaker and the nailmakers would be autonomous agents making decisions in their best interests. The bootmakers can buy nails from whoever they want, but if the market then rejects their boots because of shoddy nails, they will have to adapt. Also worth pointing out that in a specialized economy, most companies cooperate instead of competing with each other. The bootmakers likely need nails specifically designed for their boots so buying generic ones from China isn't an option. Instead they need to source a local supplier and tell them how the nails for their boots models need to be made. They enter a symbiotic relationship in which both benefit. Liberals like to see capitalism as a marathon where the runners compete with each other and the best ones win. But the system works more like the cells in a human body. Companies need to specialize and work together to be successful.
- gnarbarian 13y ago
  "Liberals like to see capitalism as a marathon where the runners compete with each other and the best ones win. But the system works more like the cells in a human body. Companies need to specialize and work together to be successful." Be careful of painting with too broad a brush. Different industries operate in vastly different ways to very different outcomes in the long term. Compare http://en.wikipedia.org/wiki/Natural_monopoly http://en.wikipedia.org/wiki/Natural_monopoly to http://en.wikipedia.org/wiki/Perfect_competition http://en.wikipedia.org/wiki/Perfect_competition

gnarbarian 13y ago

I think that some industries/services would fare much better as co-ops. And you're free to start one and do it that way. I prefer credit-unions to banks. I would love to see more co-op style ISPs. Complaining that your co-op can't compete with the more private entity and thus must be propped up or the competitor handicapped is very bad though and has a negative results for consumers at large. When they can compete with privately held monopolies supplying the same service it's a win-win situation for us. Forcing places to be co-ops is not a good idea though and equates to a different kind of tyranny. Large Companies, Governments, and even Democratic majorities (think racism) can all be tyrannical and there is no silver bullet to eliminating it. You could say I'm libertarian leaning, but I also acknowledge the reality of large organizations which can be nearly as oppressive as the state and harbor similar levels of inefficiency.

bojan 13y ago

If the workers decided these things they would never vote to outsource their own jobs and would rarely choose to pollute their own communities. In Communist Yugoslavia we had something like that. There were companies that were managed by their employees, each having one vote. A proposal that would obtain a majority of votes would get to be implemented. But it turned out that people would rather vote to use surpluses to pay everyone bonuses than to invest back in production and modernization. Many companies got themselves outcompeted this way, especially compared to their Western counterparts. It is not a bad idea, but for that system to work you need workers that: 1) are educated in at least basics of economics and management, 2) are ready to take advice of someone with more expertise than them in these subjects, 3) are well off enough that they can sacrifice immediate additional income to enhance company's prospects for the future and 4) care enough.

bjourne 13y ago
That's not very different from having a company with an incompetent board of directors. In fact, it is exactly the same thing except in the Yugoslavia scenario every worker in the company would have a seat at the board. While it is true that some people could screw up their workplace for short term gains, is it more or less likely than an "investor" milking the company for profits and running the business to the ground?
- gnarbarian 13y ago
  Who do you think is more likely to be incompetent, the board of directors of McDonald's or 10 employees chosen at random throughout the entire organization?
  - LekkoscPiwa 13y ago
    /sarcasm/ Come on! All people are equal! /sarcasm/
    - gnarbarian 13y ago
      I like you. You seem to get it. It's interesting how quickly people forget/ignore what life was like in Warsaw pact countries. Then when presented with one as an example they resort to "they practiced the wrong kind of Socialism" or "it failed because they did or didn't do X." When I ask my friends who lived there during that period they unanimously proclaim how much better life is now and how the standard of living has dramatically improved. Many more people can afford cars and there is incentive to work hard.

dnautics 13y ago

"Most socialists have moved beyond that model and would instead prefer to see a system of enterprise that uses co-op's instead of privately or publicly owned business. Some industries would probably be nationalized or socialized..." One of the earliest (and now largely forgotten) criticisms of Marx came from the American philosopher Benjamin Tucker, who facilely forsaw the rise of the communist implementations as an unavoidable consequence of Marxist socialism. So Tucker might argue that even a socialism as "modern socialists" would inevitably result in the same. Although this argument takes off further along that a partial state socialism, the crux of the idea of state expansionism and its effect on individual rights is salient: First, then, State Socialism, which may be described as the doctrine that all the affairs of men should be managed by the government, regardless of individual choice. Marx, its founder, concluded that the only way to abolish the class monopolies was to centralize and consolidate all industrial and commercial interests, all productive and distributive agencies, in one vast monopoly in the hands of the State. The government must become banker, manufacturer, farmer, carrier, and merchant, and in these capacities must suffer no competition. Land, tools, and all instruments of production must be wrested from individual hands, and made the property of the collectivity. To the individual can belong only the products to be consumed, not the means of producing them. A man may own his clothes and his food, but not the sewing-machine which makes his shirts or the spade which digs his potatoes. Product and capital are essentially different things; the former belongs to individuals, the latter to society. Society must seize the capital which belongs to it, by the ballot if it can, by revolution if it must. Once in possession of it, it must administer it on the majority principle, though its organ, the State, utilize it in production and distribution, fix all prices by the amount of labor involved, and employ the whole people in its workshops, farms, stores, etc. The nation must be transformed into a vast bureaucracy, and every individual into a State official. Everything must be done on the cost principle, the people having no motive to make a profit out of themselves. Individuals not being allowed to own capital, no one can employ another, or even himself. Every man will be a wage-receiver, and the State the only wage-payer. He who will not work for the State must starve, or, more likely, go to prison. All freedom of trade must disappear. Competition must be utterly wiped out. All industrial and commercial activity must be centered in one vast, enormous, all-inclusive monopoly. The remedy for monopolies is monopoly. Such is the economic programme of State Socialism as adopted from Karl Marx. He was writing this a full 20 years before the communist states came into existence.

gabemart 13y ago

What's to stop the type of co-op based company you describe becoming popular in the current market system?

drjesusphd 13y ago
Depends on the particular market and how bloated it's gotten. Note the recent surge in credit unions.

epsylon 13y ago

Coops, exactly. These days I'm reading the Mars Trilogy by Kim Stanley Robinson (WARNING: minor spoilers), and he mentions a lot the system of coops in the new Martian economy. One of the examples mentioned is a real-life one: the Mondragón Corporation, the world's largest coop with 80,000 employees and more than 14 billion euros in revenue. https://en.wikipedia.org/wiki/Mondrag%C3%B3n_Cooperative_Corporation https://en.wikipedia.org/wiki/Mondrag%C3%B3n_Cooperative_Cor... (For anyone interested in economics, politics, geology and many other topics, this Hugo-winning trilogy is a great read. https://en.wikipedia.org/wiki/Mars_trilogy https://en.wikipedia.org/wiki/Mars_trilogy)

paganel 13y ago

> If the workers decided these things they would never vote to outsource their own jobs That would benefit said workers themselves, but the cost (because there is a cost) will be shouldered by some other people living in the same country. In other words this is protectionism pure and simple, in the long run is detrimental for everyone involved.

vidarh 13y ago

It is an argument against a very specific form of socialism as implemented by marxist-leninists. Already by the end of the 1800's there was a wide schism between left communists/liberalist marxists, anarchist communists, Luxembourgist/Spartakists and a number of other anti-authoritarian communist ideologies on one hand, and Leninists on the other about the role of the state in the socialist transition phase, where the left communists and liberalist marxists have consistently been against the idea of a vanguard party (the leninist party model) and against the idea of a strong state. "Left communism" is generally defined by being "to the left of Leninism" (EDIT: And many left communists does not consider Leninism a socialist ideology at all), though it is worth pointing out that Leninism in itself is not necessarily authoritarian. The left communist criticism of Leninism initially focused on the (as it turned out) well founded risk that having a vanguard party following a nearly military discipline and that was not intended to include regular people in the party decision making provided a massive potential threat if it were to be abused (as it of course ended up being - it was the ultimate cultist echo-chamber combined with a fair number of power hungry people mixed in with the idealists). Most socialists have always been against this model, and most communists were arguably also against the leninist model until at least 1920 or so. After the April 1917 revolution, the Bolsheviks was a small-ish minority group even in Russia, next to the Mensheviks, Socialist-Revolutionaries, Left Socialist-Revolutionaries, most of whome were left communists, other forms of socialist revolutionaries, and some reformists. After the Bolshevik coup (the October Revolution - I don't like calling it a revolution, as it only had the support of a relatively small minority - it succeeded only because the Bolshevik support was largely concentrated in a few of the big cities, giving them the ability to cease control of the still weakened government apparatus), the Leninist model gained a lot of undeserved support, and cemented its position thanks to the combination of the perceived successes of the Bolsheviks (even some fairly right wing writers came back from the Soviet Union impressed with progress in things like electrification and got caught up in it), the civil war and the capitalist countries support for the Whites, which made it easy for the Bolsheviks to excuse pretty much anything they wanted to do by claiming they were fighting foreign funded anti-Russian/anti-Soviet counter-revolutionaries, and where the anti-Bolshevik fervour in the Western press made it impossible for socialists to trust them - even when they were right about the later excesses especially under Stalin. Left communism was still widespread enough by 1920, with left communist groups in several instances still participating in demonstrations and small scale attempted revolts and armed attacks, to make Lenin publish a pamphlet ridiculing it ("Left Communism: An Infantile Disorder"). A number of prominent left communists who had tried to remain with the Bolsheviks and try to influence the party, and many more outside it, eventually lost their lives over it as especially Stalin dialled up the terror to get full control and left communism was seen as a considerable threat. Also note that while Haldane later became skeptical about the Soviet Union, when he wrote this article, he was well on his way to becoming a Marxist-Leninist, arguably a Stalinist. As late as 1962 he reiterated his admiration for Stalin.... Anyway, though we agree that the Marxist-Leninist/Stalinist idea of socialism was fundamentally broken, what you describe is a specific type of socialism that is quite far from the mainstream today. Most socialists are social democrats. Within social democratic parties you do find some support for co-ops, but as limited tendencies (e.g. in the UK, the Co-operative Party is in permanent alliance of some sort with the Labour Party). Within most revolutionary socialist organisations finding support for the coop movement is relatively rare, as it is seen as too limited. You do find quite a lot (to the extent you can talk of "a lot" in organisations of this size...) of support for left communist ideologies like council communism and market communism though, which share characteristics similar to those you describe.

yaakov34 13y ago

You're describing syndicalism; it's not true that it was never implemented by the communists. The Soviet Union had a very serious go at it, allowing the artel as an economic unit (essentially a kind of co-op), and allowing people to freely sell products of their own labor. Within months, this led to a renewed stratification of society, the emergence of a nouveau rich class, and something approaching a return to capitalism (some people's labor is more profitable than others'). In the case of the Soviet Union, this led to a crackdown on the labor market. They also made attempts to organize along trade union lines instead - which reduces the stratification problem somewhat since a trade is not a single economic unit - but having the electricians and the mechanics within a factory report to different management was not practicable. The USSR came to its system of government-run conglomerates because it was the only way they found to combine socialism with getting at least something done; it was not their initial intention to have everything run by the government, if only because the didn't really want the management burden. In other cases, the evolution towards capitalism just ran its course. Israel stumbled into syndicalism by default - its labor unions and cooperatives predate the state. In virtually all cases, the cooperatives did not grant new members the same rights as the founding members. E.g. the bus cooperative - which started out as a free association of owner-drivers - now relies on hired labor for most of the actual driving, with wages the same as any other driving job in the capitalist free market. The final stop for this kind of developments is in the unionized ports, where they have full union members making tens of thousands of dollars a month for sinecure jobs, with a lot of the gruntwork being done by minimum-wage hired labor with no rights. It's nice to talk about how "the workers" will not vote for this or that, but when it comes to voting members - of anything - voting themselves more rights than the people asking to join, they have, they did, and they will vote for that.

vidarh 13y ago
It is worth noting that the USSR came into that system for many reasons, but not least because they tried something that Marx had explicitly warned against: Attempting revolution somewhere that was so poor that redistribution would make want for basic necessities universal. Marx pointed out already in The German Ideology (1845) that this would just cause a return to class struggle, as it creates an immense incentive for people to find ways to accumulate, no matter how much you try to crack down on it. This was one of many objections to the Bolshevik rush to try to develop socialism, but by the time of the Bolshevik power grab, Lenin had spent 25 years inventing excuses for how Russia could somehow avoid that trap, starting by his fantasy that the Bolshevik would somehow get the support of poor farmers (didn't happen)... Didn't save him from it.

pron 13y ago

> The main problem with capitalism is that someone other than the people doing the work get to decide how the work is done and how to spend the surplus of value that work generates. I think that the main problem with capitalism is that a free market system (assuming it works, though it doesn't in practice because competition doesn't quite behave according to the abstract models) strives to maximize economic output rather than welfare. Some capitalists care enough to hope that a system that maximizes product would also improve welfare, but that is not the goal; at best, it's a desirable side effect. That is why many critics of capitalism point out that under capitalism, people serve the "economy" rather than the other way around.